Archives: medical practice

The long-anticipated implementation of ICD-10 coding finally began this past Thursday, October 1, 2015.  As of that date, government and commercial payors ceased to accept claims under the old coding system (ICD-9).  The transition has been five years in the making due to a government delay in 2012.

The new system has five times the codes of the prior system, including everything from “problems in relationship with in-laws” to “pedestrian injured in collision with roller skater” to “burn due to water-skis on fire”.  The hope is that the breadth and detail of the new codes will provide greater accuracy and increase reimbursement rates.  However, the complexity of ICD-10 could also cause substantial delays in reimbursement from both the provider side and the insurer side.  While CMS and other insurers are committed to ensuring that the implementation of the new system is completed, it is up to each provider to prepare for and manage the transition in their own practice.

Here are a few tips for your practice during the transition:

  • Mitigate the risk of longer-than-expected reimbursement times by setting aside a reserve fund to cover interim operating expenses, such as payroll, in the event of a one to two week delay in reimbursement during the next few months.
  • Whenever your staff has specific claims questions, contact the appropriate payor sooner rather than later.
  • If you haven’t already, consult your practice management and EHR software vendors to find out how they recommend using their technology with the new coding system.
  • In an effort to speed up the learning curve, consider asking your billing and coding staff to dual code a few charts each day.  This will give them additional opportunities to train, while reducing the need for extra training sessions down the line.

You may have heard some years ago that the Affordable Care Act established a “60-day overpayment rule” that requires a provider to report and return any overpayment from a federal health care program (such as Medicare or Medicaid) within 60 days of “the date on which the overpayment was identified” by the provider (for certain institutional providers, the overpayment must be returned by the later of 60 days or the date on which a corresponding cost report is due to the applicable federal health care program).   Failure to return the overpayment within the required time period (60 days for physician practices) subjects the provider to liability under the False Claims Act and a fine of up to $11,000 per claim plus treble damages.

In an effort to clarify the rule, in 2012, CMS proposed that a provider has “identified” an overpayment when the provider has either “actual knowledge of the existence of the overpayment” or acted in “reckless disregard or deliberate ignorance of the overpayment”.  77 Fed. Reg. 9179, 9182-83.  However, CMS received so much negative feedback regarding its proposed interpretation of the rule that it decided to delay final guidance until 2016.  In the interim, the first court to review the 60-day overpayment rule has had an opportunity to give its opinion.

 

The Court’s Decision

In U.S. ex rel. Kane v. Continuum Health Partners, Inc., the U.S. Department of Justice, along with an ex-employee whistleblower, brought suit against Continuum Health Partners, Inc. on the grounds that Continuum failed to report and return over 900 Medicaid overpayments within 60 days of identification.   The government argued that Continuum “identified” the overpayments when the ex-employee (who was charged with investigating a software glitch in the billing system) emailed a spreadsheet of over 900 potential Medicaid overpayments to upper management of Continuum.   Continuum argued that it should not have been responsible to report or return the overpayments until it determined the precise amounts of the overpayments.

The Court sided with the federal government, denying Continuum’s motion to dismiss the case.  The Court held that Continuum “identified” the overpayments for purposes of the 60-day overpayment rule when Continuum was put on notice that the overpayments were likely to exist.  The Court explained that the spreadsheet provided by the whistleblower did not need to “conclusively establish each erroneous claim” and it did not need to “provide the specific amount owed” in order to put Continuum on notice of each overpayment, and thereby start the 60-day reporting clock.

 

What The Case Means for Providers

The Court’s decision in Continuum is not the last word on this issue.  The Court left open what it means to be “put on notice” that an overpayment is likely to exist.  Also, as noted, CMS may issue new guidance on the rule next year.  Nonetheless, the decision can provide useful guidance for providers who have discovered a potential overpayment and want to know how to comply with the rule.

The Court explained that a provider has a duty to investigate and report an overpayment within 60 days after the provider has been put on notice that the overpayment is likely to exist.  The Court also noted that a provider should not be liable under the False Claims Act for failing to return an overpayment within 60 days, if the provider (i) has reported the overpayment, (ii) is diligently investigating it, and (iii) does not intend to withhold repayment once the proper amount has been established.

In sum, the main message of the Court’s opinion is to Take Action and Report the Overpayment.  If you discover a potential overpayment, begin investigation in a reasonable timeframe.  If you are unable to determine whether the claim actually resulted in an overpayment within the 60-day time period, err on the side of caution by reporting and returning the potential overpayment.  If the overpayment(s) are substantial in amount, you may consider withholding repayment; however, be sure to report to CMS (or the applicable federal health program administrator) as much information regarding the claim as possible, including your intention to return each overpayment once the amount to be repaid is established.

Finally, before taking any action, be sure to consult your legal counsel regarding the best options for you and your practice.

Curious what the future of medicine will look like?  According to this recent article on CNBC.com, it appears that for many physicians it will involve a boss, a timeclock and a steady paycheck.  Not surprisingly, as the legal and administrative burdens of running a private practice continue to increase, more and more seasoned physicians are making the leap to hospital employment.  And, according to the CNBC article, it appears that a new generation of physicians is bypassing the private practice model altogether and heading right into hospital employment.

Unfortunately, in my experience, many hospitals are not prepared to accommodate physician employees on a large scale and often lack the expertise to manage physician practices efficiently.  After all, hsopitals are in the business (often not-for-profit) of running hospitals, not doctors’ offices.  As a result, hospital-owned physician practices can quickly become money-losing propositions.  While some hospitals may be willing to subsidize physician practices for a period of time, in my experience, they may try to play “catch-up” in the contract renewal period – imposing unrealistic performance targets on physicians or tying compensation to expenses or other factors beyond physician control.

Hospital employment can be a long-term career option but physicians should understand that most initial hospital employment terms will be less than 5 years and are commonly only 3 years.  It is critical therefore that when negotiating your initial hospital employment agreement, you try to build a framework for negotiation of renewal terms.  This may involve caps or floors on compensation adjustments, realistic performance criteria and mechanisms to overcome negotiation impasses such as reliance on independent third party valuation experts.

According to a a major study published in the Archives of Internal Medicine this week, almost half of physicians surveyed (over 7,000 physicians were surveyed), reported at least one symptom of burnout.  As a recent article in the Atlantic points out, although physician burnout may not be news to most physicians who are living with the realities of shrinking reimbursements, growing costs and increasing administrative burdens, the general public may not have a real understanding of what this means for them.  Given the financial and time investment required to become a physician, the health care reform debate likely scared a lot of folks away from attending medical school already. 

For the public, fewer physicians surely means less access to care.  More people may have insurance coverage under the Affordable Care Act but insurance coverage will do little to address the impending access problem.  Interestingly enough, however, this shortage is likely to have a silver lining for physicians who choose to stay in practice:  short supply means higher demand and higher demand is likely to mean increased reimbursement.  In other words, those hearty souls who elect to continue to brave the storm of medical practice over the next couple of years will likely be able to demand higher reimbursement rates for their services.  In fact, some doctors may find that patients are willing to pay cash to avoid waiting for care.  Stay tuned – the pendulum may be swinging back before you know it.

 

 

One of the common struggles I often come across in private medical practices is what to do when a senior physician wants to go part-time. In busy practices, this issue can be emotionally charged and I have even seen it lead to practice breakups.

Some practices simply take the position that either you work full-time, carry a full patient load, do surgery and take full on-call duties or there is no place for you in the practice. This can be a big mistake, especially if the senior physician seeking part-time status has a large patient or referring physician following.

In my experience, the key to successfully handling a physician’s transition to part-time status is having a clear documented policy in place well before the issue even arises. This takes the emotion out of the process and gives everyone fair notice of what to expect if and when they seek part-time status. Some of the key considerations that should go into a part-time policy are as follows:

• If the physician seeking part-time status is a shareholder or owner in the practice, consider whether going to part-time status should automatically require sale of his or her ownership interest back to the practice. Remember that being an owner in a business carries with it a lot of financial responsibility. Someone who is only part-time and eventually looking to move on to full retirement may be unwilling to accept these financial risks.

• The policy should spell out clearly the options for going to part-time status (e.g., no call, one last day in the office per week etc.), as well as the financial implications associated with that decision. The policy should address what will happen with the physician’s salary, bonus participation, benefits and other practice expenses such as malpractice insurance.

• The policy should spell out clearly that part-time status is of limited duration. Physicians should not have the expectation that they can drop to part-time status indefinitely; otherwise you could end up with a practice of all part-time physicians. Part-time status for senior physicians should be used as an interim step in the transition to full retirement. It is generally advisable to make termination of part-time status automatic at the end of a defined period of time so that the practice’s governing body is not forced to make a politically charged decision to either terminate part-time status or allow it to continue.

• Finally, it is critical to the success of any part-time policy that it be implemented consistently. While there can be some flexibility in implementation to account for practice needs at any given time, applying the policy in a discriminatory manner can create legal exposure for the practice and also undermine the policy’s effectiveness.

 

On Nov. 9, 2007, The Federal Trade Commission (FTC) created the Red Flags Rule requiring creditors to develop and implement written identity theft prevention programs within their organizations. The rule defines a “Creditor” any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal or continuation of credit. Because physicians do not generally collect payment in full at the time of service, The FTC has informally indicated that the Red Flag Rule requirements will likely apply to physician practices. Although some physician advocate groups such as the AMA have challenged this assertion, at present the FTC has not exempted physicians from the definition of Creditors. The compliance date in the regulations was originally November 1, 2008 but has been extended to August 1, 2009. Accordingly, physicians need to begin familiarizing themselves with the Red Flag Rule and should plan on becoming compliant by August 1.

Among other things, the Red Flag Rule requires “Creditors” to implement a written identity theft prevention program which includes reasonable policies and procedures to: (i) identify relevant red flags and incorporate those red flags into the program; (ii) detect red flags that have been incorporated into the program; (iii) respond appropriately to any red flags that are detected to prevent and mitigate identity theft; and (iv) ensure the program is updated periodically to reflect changes in the risks of identity theft. Although the regulations are fairly complex, implementing a workable program should not be overly burdensome for most practices. As the Red Flag Rule compliance date approaches, we at Fox Rothschild LLP will be developing cost effective resources to assist practices in developing compliant identity theft prevention programs. In the meantime, if you have questions regarding the Rule, please contact us here